Dear Positive Way Money Experts, some of my family members keep borrowing money from me.  The problem is that still don't improve their financial situation and things don't get better.  What can I do or say to them?  Signed, Billybob, age 42.

Dear Billybob, if you want to change the situation, you can only change your own behavior.  It is very difficult to tell others, especially family, what to do.  If you don’t want to give away your money to them anymore, just stop.  Here are some things for you to think about.

1. If their financial problems were temporary and caused by events out of their control like illness or unexpected job loss, you do have the opportunity to help them out if you are financially able.  You could give them a gift outright with no expectation of repayment.  If you want to lend them money, however, then the only way to do it is with a loan document.  You can get software to write up a loan for about $10 and some websites and office supply stores will sell you forms for about the same amount.  Or you can just write up a letter that they sign.  You have to talk about the amount of the loan, when payment is due, how payment will be made, and what the interest rate is.  This makes it a legal business transaction.
2. If they are living beyond their means in a lifestyle that they could manage using some of the dozens of methods on this site (saving money or making more money, you are under no obligation to support their habits no matter how loudly they wail or cry.
3. How you tell them that the well is dry is up to you but you might consider some of the communication tips that we have on the site to talk about your feelings and the situation you are in.  “When you ask to borrow money that we all know you don’t intend to pay back, I feel….”  “When you ask me for money and then get mad when I don’t give it to you, it feels like you are disrespecting me.  That’s not the way to treat family.”
4. Many people who spend beyond their means only do so because they can get away with it (for at least a time).  Family and others who buy into that excessive lifestyle and give them money are only enabling that bad behavior.  Those who stop buying in with their own hard earned money are actually giving the gift of a wakeup call.  They may abuse you and get mad but you have to remind yourself that you are only looking out for their better interest in the long run.
5. Consider asking them to pay you back.  Ask them what you can do to help them become more financially stable without giving them money.  How they respond will give you some insights into their attitudes about money and life.  Maybe they are ready to work and do better with some guidance.

We wish you success.  Remember that people tend to show their true selves when they are under stress.  It may not be pretty but you don’t have to buy into it.

Please remember that you are in control of your life.  None of this information should ever be considered a substitute for medical, financial or legal advice.